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TMI Blog2023 (5) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... the borrower-corporate debtor has irrevocably and generally consented in respect of any proceeding anywhere and has also waived immunity on grounds of sovereignty or otherwise - on the issue of jurisdiction it is unambiguously clear that Punjab National Bank (International) Limited as financial creditor is fully entitled and authorised to take action in respect of section 7 application against the corporate debtor under the IBC before the NCLT, Mumbai which shall be the Adjudicating Authority to adjudicate the section 7 application. The corporate debtor has not denied the issue or receipt of demand notice but has only claimed that it was unable to due repayment amount because of the severe financial and commercial stress experienced by the corporate debtor as a result of the Covid-19 pandemic - It is thus clear that the repayment of instalments of loan amounts due and payable to the corporate debtor on account of the two loan facility agreements are financial debts which are in default of repayment and the dates of the recall notice and filing of section 7 application make it clear that the application was filed within limitation. The Adjudicating Authority has not committed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s severely affected due to the unprecedented covid-19 pandemic situation and a big increase in the exchange rate for the US dollar against Indian Rupee, the corporate debtor could not repay the due loan amounts in time and hence the financial creditor filed section 7 application against the corporate debtor, in which CIRP was initiated consequent to admission of the section 7 application on 02.02.2022. 5. We have heard the arguments of both the parties and also perused the record and relevant documents. 6. The Learned Counsel for the Appellant has argued that clauses in the Loan Facility Agreements provide that these agreements shall be governed by English Law and the Courts in England shall have the jurisdiction to settle any dispute arising out of or in connection with the two Loan Facility Agreements. He has further argued that the corporate debtor is not an insolvent company but it experienced severe stress in business due to the Covid-19 pandemic and as a result it was unable to repay the required due instalments against the two Term Loans. 7. The Learned Counsel for Appellant has further argued that the corporate debtor sincerely wants to repay the debt as soon as it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue of jurisdiction for consideration of section 7 application. We note that the Loan Facility Agreements for both the Term Loans I, . The Loan Facility Agreement for Term Loan-I dated 19.11.2011 (attached at pp 41 - 90 of appeal paper book) in section 10 (Governing Law and Enforcement) states the following: SECTION 10 GOVERNING LAW AND ENFORCEMENT 34. GOVERNING LAW This Agreement is governed by English law 35. ENFORCEMENT 35.1 Jurisdiction (a) The courts of England shall have Jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispule regarding the existence, validity or termination of this Agreement) (a Dispute ). (b) The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary. (c) This Clause 35.1 is for the benefit of the Lender only. As a result, the Lender shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Lender may take concurrent proceedings in any number of jurisdictions. 35.2 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice of any claim form, proceedings or legal process under this Clause 17.7 by registered air mail to the Borrower's address specified above or such other address that the Borrower notifies to the Bank for that purpose in advance and in writing. Service by this agreed method shall be deemed to take place 5 (five) days after postage (whether or not it is received by the Borrower) and shall in any event be valid and effective service on the Borrower. (5) The Borrower irrevocably waives any objection which it may have now or in the future to the courts of England or as nominated for the purpose of sub-clause (3) above and agrees not to claim that any such court is not a convenient or appropriate forum. 12. A plain reading of the provision relating to jurisdiction makes it abundantly clear that clause 35.1 in the Loan Facility Agreement dated 17.11.2011 is for the benefit of the lender Punjab National Bank (International) Limited, and wherein clause 35.1(c) stipulates that the lender shall not be prevented from taking proceedings relating to a dispute in any other Courts than the courts of England and also that the lender is empowered to taking concurrent proceedings in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The Corporate Debtor further submits that the liability of the Corporate Debtor is neither disputed nor denied. However, due to Covid-19 and other factors its business has drastically gone down, therefore, inability to repay the loan amount, which doesn t mean that the business of the Corporate Debtor is going to wind up. It is trying to restore their business position as it was in the past, but it will take sufficient time to recover in the same manner. Therefore, requires more time to repay the loan. The Corporate Debtor relied upon a judgment by the Hon ble Supreme Court in the case of A Navinchandra Steels Pvt. Ltd. v/s. SREI Equipments Finance Ltd., 2021 4 SCC 435 , which says every effort should be made to resuscitate the Corporate Debtor in the larger public interest, which includes not only the workmen of the Corporate Debtor but also its creditors and the goods it produces in the larger interest of the company of the country . 9. The Corporate Debtor further submits that it is approaching the Financial Creditor for One Time Settlement (OTS), which itself proves its honest intention to repay the loan. The Corporate Debtor in its reply submitted undertook to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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